Plug-In Hybrid and EV Tax Credits
Claim a federal tax credit of up to $7,500 for purchasing a new hybrid or electric vehicle (EV). Electric vehicle and hybrid sales have been steadily increasing since their creation; consider this tax incentive to make the move from gas to an electric powered automobile. The hybrid and electric vehicle tax credit can
lower your taxes!
Tax Credit
e-Auto
Tax Credit for Buying a Hybrid or EV
Important: As part of the Inflation Reduction Act, both plug-in hybrids and electric vehicles got a reworked credit for current and future purchases through 2032. Get the details here: Clean Vehicle Tax Credit for EVs and Hybrids.
If you purchased a plug-in hybrid motor vehicle, you may be able to claim credit on your tax return. You may also be able to amend a tax return to claim credit if you purchased it in a previous year and owed taxes. This tax credit is nonrefundable and will only offset your tax liability for a given tax year; the hybrid or EV tax credit can help if you are self-employed and do not have taxes withheld from your pay.
The hybrid tax credit is the same as the EV tax credit for your IRS return. The Clean Vehicle Credit - formally the Qualified Plug-In Electric Drive Motor Vehicle Credit - can be worth up to $7,500 in nonrefundable credit. It applies to plug-in hybrid vehicles, or PHEVs, and plug-in electric vehicles, EVs or PEVs.
Key Points of the Hybrid and EV Tax Credit:
- Is there a tax credit for buying a hybrid car or electric vehicle? Yes, hybrid and electric vehicles may not be a tax write off, but may instead be eligible for a credit on your return.
- You may be able to get a maximum of $7,500 towards your taxes on your tax return.
- The hybrid tax credit will not increase your refund because it is nonrefundable.
- You can get the EV or hybrid tax credit up front via the Clean Vehicle Credit - highly encouraged since this goes directly towards the cost of your vehicle.
Considering buying a hybrid? These vehicles will continue to be manufactured for sale for years; claim credit for your investment on your tax return.
Tax Credit for Hybrids
This federal EV credit can be claimed for a qualified plug-in hybrid vehicle that was put into service in the U.S. during the year. The vehicle has a simple set of guidelines to meet:
- The vehicle in question weighs less than 14,000 pounds.
- It is powered significantly by electric motor which holds a minimum of 5 kilowatt hours and can be charged externally.
- The vehicle was purchased new.
Important: There are more details on the EV Tax Credit page. For current year taxes, see the Clean Vehicle Credit page for specifics, including price limits, income limits, assembly requirements, used vehicle qualifications, and more.
A qualifying vehicle is not a traditional hybrid electric vehicle, or HEV. Some popular hybrid vehicles that are not eligible for the credit include the non-plug-in models of the Toyota Prius, Toyota RAV4 Hybrid, Toyota Camry Hybrid, Ford Fusion and Milan Hybrids, and the Honda Insight and Accord Hybrids. The plug-in versions of these models may qualify.
The federal hybrid and EV tax credit works by giving you a nonrefundable credit on your income tax return. This IRS tax credit can be worth anywhere from $2,500 to $7,500 determined by the power storage of the battery. In general, fully electric vehicles can claim more of the credit than plug-in hybrid vehicles as their battery has more storage. Note that this tax credit is nonrefundable and will not generate a tax refund on its own. In other words, if you owe $2,500 on your tax return, but claim credit for a PHEV worth $5,000, you will receive $2,500 and the remaining $2,500 will be eliminated. It does not carry forward and needs to be used in the year the vehicle was purchased.
The credit may be applied to certain two-wheeled vehicles as well. This follows the same guidelines as a four-wheeled vehicle, except the battery capacity must be at least 2.5 kilowatt hours instead of 4. The amount, however, can be claimed up to $2,500 instead of $7,500.
Does My Hybrid Qualify for the Hybrid or EV Tax Credit?
There are three major types of alternative fuel vehicles: hybrids, electric vehicles, and fuel cell vehicles. A hybrid is a vehicle that utilizes electric energy and traditional gasoline energy to power the vehicle. An electric vehicle relies entirely on electricity to run the vehicle. Fuel cell vehicles are given power by combining hydrogen and oxygen to produce electricity - these vehicles are the least common of alternative fuel vehicles.
See the table below to see if your vehicle qualifies - check your eligibility here for the current year EV tax credit.
When you e-file your current year tax return on eFile.com, you don't need to worry about which of the many federal tax credits you qualify to claim on your tax return. Simply answer a couple of questions and the eFile app will select the correct tax credit form(s) for you to complete. The app will also calculate and enter your credit amount on your return plus other tax credits and deductions you may qualify for. See how much your tax refund or tax liability could be and prepare to prepare for Tax Day.
It is important to note that there are traditional hybrid vehicles which get their energy from both a gasoline engine and electric motor simultaneously while a plug-in hybrid will use the battery energy before resorting to gasoline in the tank. The plug-in hybrids are the only hybrids which qualify for the tax credit since they rely primarily on electric energy.
Additionally, some states offer cash rebates as an incentive for its taxpayers to invest in a plug-in electric or hybrid vehicle. California, for example, offers up to $7,000 in the form of a rebate through the Clean Vehicle Rebate Project (CVRP) as the CA EV tax credit. This covers electric cars, hybrid electric cars, and fuel cell vehicles.
If the vehicle in question was purchased as a business expense, it may be able to be claimed on Form 3800, General Business Credit- eFileIT. This credit carries forward for businesses if it is not used in the year it is purchased.
How Long Do I Have to Claim the Hybrid Credit?
This credit does carryover for businesses only; the EV tax credit does not carry forward for individuals and has to be used for the year the vehicle is purchased. For this, it has to be claimed in the year the vehicle was purchased and any unused portion will be eliminated if there is a tax liability. In other words, if the business claims the full $7,500 credit, but only owed $2,000 in tax, then the remaining $5,000 will not carry forward and will instead be eliminated. If, however, the business is owed a tax refund and has no tax liability, then the credit will be unused and will carry forward to the next year.
Clean Vehicle Credit: when you prepare and file your current year tax return on eFile.com, you will answer simple questions that will allow eFile app to claim the credit, if applicable. The form generated will be Form 8936 - eFileIT. For the old hybrid tax credit, claim it on Form 8936 for the year in question.
Vehicles that are Eligible for the Credit Before 2023
Important: The details and information below apply to the original credit for returns prior to 2023 called the Plug-In Electric Drive Motor Vehicle Credit. The remainder of this page is geared towards the pre-2023 credit for EVs and hybrids. Get the details on the current year EV and hybrid tax credit page.
The following plug-in hybrids, according to the IRS, are eligible for the Qualified Plug-In Electric Drive Motor Vehicle Tax Credit. General Motors and Tesla vehicles are generally not eligible for the tax credit. The amounts vary based on the power storage capability of the battery.
Note: The phaseout threshold applies only to vehicles purchased before 2023.
This credit may start to phase out once a company has sold 200,000 qualifying vehicles. Cadillac, General Motors, and Tesla were the only companies to reach this threshold for plug-in hybrids (GM) and plug-in electric vehicles (Tesla). Thus, these hybrid and electric vehicles purchased in 2022 and prior are not eligible for a tax credit. For vehicles purchased after 2023, the phaseout no longer applies. The phaseout period begins by allowing taxpayers to claim 50% of the credit if the purchasing of the vehicle took place in the first two quarters since the phaseout initiated. From there, 25% of the credit can be claimed for the second two quarters. See General Motors in the table below to see an example of these amounts.
American Honda Motor Co., Inc.
Accord Plug-In Hybrid (2014)
$3,626
American Honda Motor Co., Inc.
Clarity Plug-In Hybrid (2018-2021)
$7,500
Audi of America, LLC
A3 e-tron (Ultra) (2016-2018)
$4,502
Audi of America, LLC
A8L PHEV (2020); Q5 PHEV;
Q5 TFSI e Quattro (2020),
A7 55 TFSI e Quattro (2021)
$6,712
Audi of America, LLC
A7 & Q5 TFSI e Quattro (2022),
$7,500
Bentley
Bentayga Hybrid (2020 - 2021)
$7,500
BMW of America
i3(s) Sedan (2014-2021); X5 xDrive45e (2021);
$7,500
BMW of America
i8 Coupe (2019, 2020); i8 Roadster (2019, 2020)
$5,669
BMW of America
i8 (2014-2020)
$3,793
BMW of America
X5 xDrive40e (2016-2018)
$4,668
BMW of America
330e (2016-2018);
MINI Cooper S E Countryman ALL4 (2018-2019)
$4,001
BMW of America
530e (xDrive) (2018, 2019); 740e (xDrive) (2018, 2019)
$4,668
BMW of America
745e xDrive (2020-2021); 530e (xDrive) (2020-2021);
330e (xDrive) (2021); X3 xDrive30e (2020-2021)
$5,836
BMW of America
MINI Cooper S E Countryman ALL4 (2020-2022)
$5,002
FCA (Fiat, Chrysler Automobiles) North America Holding, LLC.
Chrysler Pacifica PHEV (2017-2021)
$7,500
Ferrari
SF90 Stradale (2020-2021)
$3,501
Fisker Automotive
Karma Sedan (2012)
$7,500
Ford Motor Company
C-MAX Energi (2013-2017); Fusion Energi (2013-2018)
$4,007
Ford Motor Company
Fusion Energi (2019-2020)
$4,609
Ford Motor Company; Lincoln
Ford Escape Plug-in Hybrid (2020-2021);
Lincoln Corsair (Reserve) Grand Touring (2021-2022)
$6,834
Ford Motor Company; Lincoln
Lincoln Aviator Grand Touring (2020-2021)
$6,534
General Motors, LLC.
Chevrolet Volt (2011-2019);
Cadillac ELR (2014, 2016);
Cadillac CT6 Plug-In (2017-2018)
*$7,500 if acquired through 3/31/2019;
$3,750 (4/1/2019 - 9/30/2019);
$1,875 (10/1/2019 - 3/31/2020)
Hyundai
Ioniq EPlug-In Hybrid Electric Vehicle (2018-2021)
$4,543
Hyundai
Sonata Plug-in Hybrid Electric Vehicle (2016-2019)
$4,919
Hyundai
Tucson Plug-in Hybrid (2022); Santa Fe Plug-in Hybrid (2022)
$7,500
Jaguar Land Rover North America, LLC.
Land Rover Range Rover (Sport) PHEV (HSE) (2019)
$7,087
Jaguar Land Rover North America, LLC.
Range Rover (Sport, SE, Autobiography models) PHEV (2023);
$7,500
Jaguar Land Rover North America, LLC.
Range Rover (Sport, HSE, Autobiography models) PHEV (2020 - 2022);
$6,295
Jeep
Jeep Wrangler 4xe PHEV (2021)
$7,500
Karma
Revero (2018)
$7,500
Kia Motors America, Inc.
Optima Plug-In Hybrid (2017-2021)
$4,919
Kia Motors America, Inc.
Niro Plug-In Hybrid (2018-2022)
$4,543
Kia Motors America, Inc.
Sorento Plug-In Hybrid (2022)
$6,587
Lexus, Toyota Inc.
NX Plug-In Hybrid (2022)
$7,500
McLaren LLC
Artura (2022)
$4,585
Mercedes-Benz USA, LLC
S550e PHEV (2015-2017);
GLE550e 4m PHEV (2016-2018);
GLC350e 4M PHEV (2018-2019)
$4,460 (revised 1/24/2018)
Mercedes-Benz USA, LLC
C350e PHEV (2016-2018)
$3,501 (revised 1/24/2018)
Mercedes-Benz USA, LLC
GLC 350 4M EQ (2020);
S560e EQ PHEV (2020)
$6,462
Mitsubishi Motors North America, Inc.
Outlander PHEV (2018-2020)
$5,836
Mitsubishi Motors North America, Inc.
Outlander PHEV (2021)
$6,587
Polestar Automotive USA Inc.
Polestar 1 (2020)
$7,500
Porsche Cars North America, Inc.
918 Spyder (2015)
$3,667
Porsche Cars North America, Inc.
Cayenne S E-Hybrid (2015-2018)
$5,336
Porsche Cars North America, Inc.
Cayenne E-Hybrid (Coupe) (2019-2020);
Panamera 4 PHEV (all models) (2019-2020)
$6,712
Porsche Cars North America, Inc.
Panamera S E-Hybrid (2014-2016)
$4,752
Porsche Cars North America, Inc.
Panamera 4 PHEV (all models) (2018)
$6,670
Porsche Cars North America, Inc.
Panamera 4 PHEV (all models) (2021-2022)
$7,500
Subaru
Crosstrek Hybrid (2019-2021)
$4,502
Toyota Motor Sales, U.S.A., Inc.
Prius Plug-in Hybrid (2012-2015)
$2,500
Toyota Motor Sales, U.S.A., Inc.
Prius Prime Plug-in Hybrid (2017-2021)
$4,502
Toyota Motor Sales, U.S.A., Inc.
RAV4 Prime Plug-In Hybrid (2021)
$7,500
VIA Motors, Inc.
2500 Extended Range Electric Passenger Van (2014);
VIA 1500 Extended Range Electric Truck 4WD (all body styles) (2014);
2500 Extended Range Electric Cargo Van (2014);
1500 Extended Range Electric Truck 2WD (All body styles) (2014)
$7,500
Volvo Cars of North America, LLC
S60 (2019); XC60 (2018-2019);
S90 (2018-2019);
XC90 (Excellence) (2018-2019)
$5,002
Volvo Cars of North America, LLC
S60 (2020-2021); S90 (2020-2021); V60 (2020-2021);
XC60 (2020-2021); XC90 (2020-2021)
$5,419
Volvo Cars of North America, LLC
XC90 (2016-2017)
$4,585
Volvo Cars of North America, LLC
S60, S90, V60, XC60, & XC90 Extended Range (2022)
$7,500
*Companies who have initiated phasing out indicate different, decrementing values based on the year purchased. Only General Motors and Tesla (electric vehicles only) finished this process. See a list of all qualifying electric vehicles.
Some of the most popular plug-in hybrid vehicles are from Toyota, such as the well-known Prius, Prius Plug-In, and RAV4 hybrid plug-in models. The hybrid Corolla and Camry models also sell exceptionally well, but these are not plug-in vehicles.
Do you own or want to invest in any of these vehicles? Make sure you get the most out of your investment when you file your taxes. Claim the credit via Form 8936 and eFileIT on eFile.com. Start your return now - see how eFile.com compares to TurboTax® or H&R Block®.
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